With low liability thresholds and high penalties, consumer fraud and unfair trade practice acts reflect efforts to draft laws broad enough to reach and strong enough to deter all the infinite ways consumers might be disadvantaged. If applied without consideration of interests other than consumer protection, however, these statutes can cross the line from effective to oppressive government action.
In many states, unfair trade practice acts have been used to penalize pharmaceutical marketing and labeling for its mere potential to be misunderstood, even in the absence of proof of falsity, intent, actual deception or injury. In theory, such claims could be pursued under the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to 195 (CFA), but, to date, New Jersey’s statute has not been construed this broadly. Moreover, particularly in light of the recent decision in United States v. Alvarez, 132 S. Ct. 2537 (2012), the First Amendment imposes significant restrictions on any attempt to do so.
N.J. Consumer Fraud Act
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